13 Sep 2009, 1108 hrs IST, Anand Rawani, ET Bureau
ICICI Bank's Rs 10k-cr bad loans under lens

NEW DELHI: The institute of Chartered Accountants of India (ICAI) has raised questions about ICICI Bank’s home loans business and has sought a Tips for home loan borrowers Home loan: Documents you need Tax deduction on home loan fresh central bank audit of a two-year-old sale deal of dud loans, after a Mumbai-based chartered accountant spotted irregularities in some loans. “The regulator should re-audit assets sold to ARCIL,” ICAI president Uttam Prakash Agarwal told SundayET, referring to the sale of bad home loan assets worth over Rs 10,000 crore by the bank to the asset reconstruction company. ICICI Bank is accused of lending money for the purchase of some apartments in a housing project in a Mumbai suburb, and in some cases twice for the same set of apartments. According to the chartered accountant who spotted irregularities, the bank disbursed home loans for the purchase of 15 apartments in the Ritu Paradise Project developed by S R Developers in Mumbai’s Mira Road. Documents available with ICAI and in SundayET’s possession show that double loans were issued by the Bank on some flats. These loans were part of the block of bad loans sold to ARCIL, which helps banks to free up capital by buying such loans and seeks to recover them. Although the loan amount for these 15 flats were only in the region of only Rs 2-3 crore, the accounting regulator is of the view that the bank bears responsibility for selling off these bad loans to ARCIL without verifying it. A spokesman for ICICI Bank admitted that such an incident had taken place. “When this asset was sold to ARCIL, this was not identified as fraud. The builder fraudulently recreated the entire documentation and sought finance. Such frauds are a challenge to the industry,” he said. On the issue of loans being issued twice for the same property, the ICICI spokesman said: “Since there is no central database, it is almost impossible to track whether any loan has already been given against a specific property.” But ICAI said this episode exposed holes in the bank’s systems. “In four cases, double loans were issued by ICICI Bank itself. This shows the inability of the bank’s IT set up and its due diligence mechanism,” Mr Agarwal said. He added that the appointment of auditors in private sector banks should also be done by RBI as in the case of public sector banks. “No autonomy should be given to the management of the private sector banks. In the past too, there were accounting issues and the recent example is the fall of Global Trust Bank”, he said.

13/Sep/2009
The Economic Times

The institute of Chartered Accountants of India (ICAI) has raised questions about ICICI Bank’s home loans business and has sought a fresh central bank audit of a two-year-old sale deal of dud loans, after a Mumbai-based chartered accountant spotted irregularities in some loans.

“The regulator should re-audit assets sold to ARCIL,” ICAI president Uttam Prakash Agarwal told SundayET, referring to the sale of bad home loan assets worth over Rs 10,000 crore by the bank to the asset reconstruction company.

ICICI Bank is accused of lending money for the purchase of some apartments in a housing project in a Mumbai suburb, and in some cases twice for the same set of apartments.

According to the chartered accountant who spotted irregularities, the bank disbursed home loans for the purchase of 15 apartments in the Ritu Paradise Project developed by S R Developers in Mumbai’s Mira Road. Documents available with ICAI and in SundayET’s possession show that double loans were issued by the Bank on some flats.

These loans were part of the block of bad loans sold to ARCIL, which helps banks to free up capital by buying such loans and seeks to recover them.

For more on this:

We are producing below the  clarification in regard to the above published on ICAIs website.

13th September, 2009

The Editor. The Economics Times, Times House, 7, Bahadur Shah Zafar Marg, New Delhi – 110002

This has reference to the lead news item entitled “ICICI Bank’s Rs. 10K-cr bad loans under lens“ by Mr Anand Rawani published in your esteemed newspaper datelined 13th September, 2009. 

In regard to the said news item, we wish to bring to your kind notice that the quote cited in the said news item in the second para, reportedly made by ICAI President CA. Uttam Prakash Agarwal and thereafter the reference made to “sale of bad home loan assets worth over Rs. 10,000 crores” are totally incorrect, wrong and completely baseless and as such the same is denied. We also would like to clarify that ICAI has not asked for any central bank audit of assets sold to ARCIL. We completely deny this statement attributed to us as well.

You are therefore requested to kindly take required corrective measures immediately and publish the facts of the matter prominently in your daily under intimation to us.

For the purpose of setting the records right, we may mention that the fact of the mater has been that when few Mumbai-based chartered accountants approached the ICAI President CA. Uttam Prakash Agarwal regarding the harassment being meted out to them, despite they being genuine buyers of the flats in the society referred to the news item, the latter had advised them to take up the matter with the authorities in the Bank at their individual level. He had also assured them that if their plea is genuine and on getting the feedback from them about the authorities’ response, he would take up the matter with the Bank and its regulator at the top level, if need be.

Yours faithfully,

(T. Karthikeyan)

Secretary

Yours faithfully,

(T. Karthikeyan)

Secretary

IG LOAD SCAMS FROM PUBLIC SECTOR BANKS..AND NOW ICICI TOO JOINED THE BAD BAND WAGON..AN ORDINARY ACCOUNT HOLDER FOR A GENUINE LOAN IS BEING HARRASED FOR WANT OF PROPER DOCUMENTS AND HOW COME THE BANK CAN ISSUE DOUBLE LOANS ON SAME PROJECTS..LETS THE RBI PONDER OVER..K MOHAN,RAGHAVENDRA COLONY,SAINIKPURI,SECUNDERBAD

The Icici officials refused to release the money to me after sanctioning the loan by obtaining EMI cheques. The reason stated by them was "illegal funding " in accordance to the RBI circular since the flat I purchased was under regularisation scheme.

How this Bank granted Rs.10000 crores of loan without looking into the interest of the Bank's interest.

The share holders of the Bank must insist for a probe by CBI

rajesh a

let ICICI and those with it go to hell is my sincere prayer

subhash

A PUBLIC PROBE NEEDED

alok s

SBewaew o ICICI bank. It simply cheat people by providin easy ;oan

manikantmo…

Since long I had doubt on the capability of ICICI Bank being a quality bank. Now it is clear that it is a lousy bank.
Another bubble is going to bust and our economy will gain shiver.

S.Rajan

Corrupt officers are responsible for this kind of fraud.

I don't have faith in their function.

hiten

yes ,i think so it should be scrutinised very strictly, see we postpon our current consumption and save money like this in small investments but like this if bank will do then what is the security available for depositors and investors, we keep on hearing since last few period about ICICI problems, something strict action should be instructed by RBI to look upon the matter to raise the actual vail of workings

Radhakrish…

icici staff need to exercise lot of discipline and keepingntheir false pride at home. they also practice respecting customers. in my experience, they are well vwerced in harassing customers. they are really not interested in genuinely serving the bank, but to make money by side business. icici management should attend to the various complaints being received by them and serious about it by taking severe action against the staff committing wrong and spoiling the name of the bank. according to me the management ls least bothered about the behaviour of staff and irregularities committed by them because they know goverment will help them out if a crisis comes out

Shokindra

i intersted

Pratap…

I think the time has come to really check out the fuctioning style of icici bank...I know very well that when it comes to lure the common man with galamorous ad campaigns and instant customer satisfaction, they have a huge lead over the psu bank... but I think in the long run, their only purpose is profit overlooking the the strategic interest of the common man.

pmajumdar1

We should keep safe distance from this type of organisation like UTI fraud case whether RBI take any action or not people should boycott such banks.

rajan_tt

It is our money is safe with them?????

Amar

NICE BANK

THAKUR

shut the bank.And hang who is responsible.

Srinivasan

Some of the private banks may have tend to sanction housing loan even for the flats without proper plan sanction from the authorities and also without the completion certificate. There may be a possibility of collaboration of insiders as well as the promoters. It will be another bubble like U.S.A. if it is properly probed. Unfortunately it seems RBI a controlling machanism is not using its control fully. The common man's money is to be protected properly.

ritesh s

ICICI Bank is like this. They have posted non-experienced and novice staff in their office, but offcourse good looking but with no Banking knowledge. They recruit people by seeing their faces and not qualifications. So this type of fraud was waiting to happen. Now SBI is once again becomeing formidable player with their experience and knowledgebale staff with some application of customer serivce.

poorna

Let face this problem ICICI. Really now I cleared ICICI is worst and fraud bank. Thank god... you have saved many of the people around the world.....

INDRAJIT

yea... I think this has happened due to credit policy on that time, as in the market there were many nos of NBFC's and compitetion is high.. Co should highly focus on collection and reduce the deliquency level...

ganesan

I totally agree with most the comments above. As a private banker you sell or part with the loan portfolio (home loan/credit card/personal loan etc. products) to franchisees. When ICICI bank does it, it is not bothered about the compatibility in computer systerm. For example, ICICI bank is lending to its customers based on the agrreement entered into by the Bank with the custmer; even though there is an enabling clause for the bank that it may authorise some one to collect the loan from the borrower, in actual case the terms and conditions totally vary when ICICI authorises its franchisees.

Worst banking system - RBI / Ombudsmen is keeping silent in watching such practices adopted by ICICI Bank and other Banks including SBI when to they sell their assets to Franchisees.
PM, Dr.Manmohanji (Ex RBI Governor) has no time to speak on these issues. Dr.Chidambaram (Ex-Finance Minister) has not done anything on these issues.

padam

icici bank not credited sb a/c intrest more time his client

imu9in

This thing is not expecting Where is Big B the Brand Ambasdor

imu9in

Where is Big B the brand Ambasdor

imu9in

Where is SRK the brabd ambasdor